I guess I was ahead of my time a bit when I started recommending that advisors get their 65 and work with the www.pomplanning.net platform (the RIA I recommend). Since I started recommending it over four years ago, over 200 advisors have come on board and have gathered over $750 million in AUM (Assets Under Management).

With the DOL fiduciary rule going into place, many IMOs have gotten on the Series 65 band wagon by cutting deals with RIAs to market to their agents. Fundamentally I don’t have any issues with an IMO preaching the same thing I’ve been saying for over four years. The problem is the platforms they are recommending are not very good (in my opinion).

Most Recent IMO/IRA Platform I Don’t Like–in my 2015 newsletter, I picked on one of the largest IMOs in the industry that put forth what I thought was a terrible AUM platform for advisors to use. This time I’m again picking on one of the bigger IMOs.

Doesn’t the following look great? The green line is a tactically managed high yield bond (HYB) strategy and the red line is the aggregate bond index. Unfortunately, all but a few months of the green line is a hypothetical back-test, not real numbers.

The above chart comes from one of the managers of the RIA the IMO I’m picking on recommends. The strategy has virtually no historical returns. However, their marketing material like the chart above makes it look like the funds returns go back to 2007.

Less than 1 year-the strategy from the above chart has an “actual” track record going back only to 09-30-16 (that’s not even a year old). If you want to see their marketing material for yourself, click on the following link.

POM Planning has a tactically managed HYB strategy that was started back in 1991. It has a real track record for clients to evaluate.

Why an RIA would recommend a strategy that has no real track record is beyond me. Why an IMO would work with an RIA that offers such a bond strategy also makes no sense, although it doesn’t surprise me.

The following is a chart from the OnPointe Investment Risk Software that compares the same time frames as above, except the data IS NOT hypothetical. It’s real and it’s been audited.

The above chart compares the HYB strategy (blue line) offered by POM Planning to the aggregate bond index (grey line). It looks somewhat similar to the previous chart except, again, the numbers are real, NOT hypothetical.

Click on the following link to download information on the tactical HYB strategy offered by POM Planning.

What the above newsletter should illustrate to readers is that most IMOs do a terrible job vetting the RIAs they end up recommending to agents. While passing the Series 65 exam and working with an RIA can help you comply with the DOL fiduciary rule and pick up AUM; be very cautious. Using the wrong RIA platform could cost you your reputation and do a huge disservice to your clients.